June 21, 2024

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Goldman Sachs is eyeing a big payout from the Silicon Valley bank deal

Goldman Sachs is eyeing a big payout from the Silicon Valley bank deal

But not all Democratic senators and their allies agree that deregulation in 2018 was the culprit here: John Tester of Montana and Angus King, an independent of Maine, both said they Stand by their voices to step back five years ago. That split, combined with broad Republican opposition to tougher banking rules, means it’s hard to see the legislative path ahead.

Concerns about regional lenders continue to subside. Stocks jumped in smaller banks such as First Republic, Western Alliance and PacWest Bancorp on Tuesday, as investors were reassured by the Fed’s bank support. Shares of Charles Schwab also rose on Tuesday as the company’s CEO said its bank is still Receive deposit inflows.

The job of cleaning up failed banks isn’t over. Investment firms such as Apollo and Blackstone are considering bids to acquire parts of Silicon Valley Bank’s loan book, possibly using With the support of venture capitalists. And Creditors have come together In anticipation of a possible bankruptcy declaration by the bank.

Meanwhile, the organizers started Solicit bids for the signature bank.

BlackRock Chairman Larry Fink has used his influential annual letter to push the world’s business leaders to do more on climate change and turn their words about corporate goals into action. His letter of the year, released on Wednesday, continues that theme but also carries a timely (stark) warning: The banking sector will need to transform itself in the wake of last week’s Silicon Valley bank collapse to survive. .

Bank stocks may have rebounded, but contagion fears – and stagnation – persevere. Fink warned that lenders will have to act differently in an era of high interest rates. They will also face tougher rules and greater regulatory oversight as a result of the failure of Silicon Valley Bank and Signature Bank. He said they would need to hold more capital on their books (which they would likely need to add through capital markets) to avoid the kind of “liquidity mismatch” that led to SVB’s collapse.

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Previous Fed cycles of rapid interest rate tightening ‘led to massive financial turmoil’ Such as the bankruptcy of Orange County, California, in 1994, he wrote, and the savings and loan crisis of the 1980s and 1990s. “We don’t know yet if the consequences of the easy money and regulatory changes will fade across the US regional banking sector (similar to the S. & L. crisis) with more forfeiture and closures to come,” he said.